PAGCOR Defends Offshore Gaming Operations After Philippines Finance Secretary Claims Taxes Missing

Posted on: March 14, 2019, 12:07h. 

Last updated on: March 14, 2019, 12:07h.

Devin O'Connor @CasinoorgDevinO Read More
Expertise: Asia Pacific Gaming, Commercial Gaming, Legislation, Politics.

PAGCOR, the gaming regulator in the Philippines, says it’s properly governing offshore gaming operators after the country’s finance minister said the federal government is missing PHP3 billion ($57 million) monthly in taxes from foreign workers.

PAGCOR casino Philippines offshore gaming
PAGCOR chief Andrea Domingo says making sure employees in the offshore gaming industry pay their federal income taxes isn’t a responsibility that fully rests with her agency. (Image: Bullit Marquez/AP)

The Philippines Gaming and Amusement Corporation released a statement this week that shows revenue generated by Philippine Offshore Gaming Operations (POGO) totaled nearly $140 million last year. That’s up almost double from 2017, the regulatory body said.

Philippines Finance Secretary Carlos Dominguez III claimed last week that the federal government isn’t receiving the appropriate tax revenue from salaries paid to foreign POGO workers. PAGCOR Chair Andrea Domingo responded that the employment situation regarding such positions is complex, and therefore the liability doesn’t rely simply with her agency.

Foreign workers are regulated by both the Department of Labor and Employment and the Bureau of Immigration,” Domingo explained. “For our part, PAGCOR upholds lawful employment.”

“Employing undocumented foreign workers by licensed operations and their accredited service providers is a violation warranting imposition of demerits, fines, and other administrative penalties, without prejudice to suspension of operations and/or cancellation of license or accreditation,” the statement concluded.

PAGCOR, POGO, and Rodrigo

Revenue from POGO operations has been playing a more significant role in funding PAGCOR in recent years. PAGCOR – a gaming regulator and operator that owns eight Casino Filipino venues and nearly three dozen smaller satellite venues – directs its revenue to the federal government. It is the Philippines’ second largest tax generator behind only the Bureau of Internal Revenue.

Philippines President Rodrigo Duterte opposed most forms of gambling upon taking office in 2016, but later reversed course in an effort to grow much-needed federal funding.

POGO?

In 2016, PAGCOR developed rules and regulations to allow Filipino gaming companies to operate online casinos that target players located in other countries – aka “offshore.” Many licensed POGO operators have brought in foreigners to work in capacities such as IT and customer service.

Tax money from such gambling has skyrocketed from its first year in 2016. Funds received by PAGCOR jumped from just $12 million in the inaugural year, to the $140 million haul in 2018.

Finance Chair Angered

Domingo said the majority of foreign workers employed in POGO operations are Chinese. Offshore gaming sites primarily target China, and there’s a great need for operators to have employees who speak Mandarin.

Dominguez III believes many of those internationals aren’t properly paying their taxes. He told the Philippine Daily Inquirer, “I checked with the Bureau of Internal Revenue, and they said they don’t have a clue.”

It’s so unfair that Filipinos doing the same kind of work pay tax,” he continued. “Why should foreigners not pay tax? That’s the law. All I want is fairness.”

Along with immigrant workers allegedly not paying their taxes, many gaming dens aren’t obtaining the appropriate licenses from PAGCOR to operate offshore networks. More than 170 alleged illegal internet gaming enterprises have been raided by federal law enforcement agencies over the last two years.